The collapse of global trade, murky protectionism, and the crisis:

The collapse of global trade, murky protectionism, and the crisis
ly demonstrates the value of the WTO-based multilateral trading system.
As President Moreno and the African Development Bank secretariat argue, the
Doha talks contain some of the most practical issues for developing nations. Latin
America, Africa and parts of Asia are endowed with highly competitive agricultural
sectors. The Doha talks are the only realistic way of further opening world markets to
such exports. Other Doha-linked initiatives, such as Aid for Trade, and WTO trade
facilitation talks are also important for developing nations. Chapter 19 by Gerard
McLinden covers these issues in depth and suggests concrete steps G20 leaders could
take.
In his capstone essay, President Zedillo captures the consensus by arguing that G20
leaders need to "descend" to the lowly task of deal making. They should show up at
the London Summit fully briefed on the most contentious issues, and proceed to outline
compromises. This should be followed by an unequivocal commitment to do
whatever necessary to have their Ministers deliver the so-called modalities by early
summer 2009.
Resist green protectionism – or pay the price at Copenhagen
A final and very important point is made in Chapter 18, written by Simon Evenett
and John Whalley.
Many G20 leaders say they want a climate change deal at the Copenhagen summit
in December 2009. Most indications are that a climate-change deal would involve the
introduction of complex new taxes and schemes. Given the inevitable uncertainties
and evolving nature of the challenges, such schemes must involve substantial discretion
if they are to be properly implemented. It is very naïve to think that developing
country governments – whose assent is needed to conclude a climate change deal –
will cooperate if they feel that the discretion associated with existing environmental
policies in industrialised countries was misused to shut out imports during the current
global economic downturn. A developing country veto of a strong climate
change deal may well be the price of crisis-induced green protectionism.
G20 policymakers need to bear this in mind and instruct their government officials
to implement environmental initiatives in a manner that not only puts foreign firms
on an equal footing with domestic firms but also is seen to do so. Just like other forms
of murky protectionism, being seen to give unequal treatment is almost as damaging
as the unfair treatment itself.
Conclusion: Push trade further up the London Summit agenda
Today's crisis is very different from the one facing Global leaders at their November
2008 meeting in Washington. Last November, the crisis was, or at least was perceived
as being, mostly a financial crisis – and mostly confined to the G7 economies. To use
a military analogy, it was as if the crisis were a landmine that the US and European
economies had stepped on. Because the landmine had also been 'planted' by US and
European financial markets, Brazil, India, China, South Africa and other emerging
nations at the November 2008 meeting seemed to be only indirectly concerned.
In the past six months, the landmine crisis has become a cluster-bomb crisis, with
recession-inducing projectiles flying in every direction. While G7 financial rescue and
macro stimulus efforts must be at the heart of the world's response, many G20
nations – perhaps a majority – are bystanders in discussions of massive stimulus
packages and fundamental reform of the world's most sophisticated financial prac-
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